TAX CREDITS & TAX-EXEMPT BONDS: STATE-BY-STATE PREVIEW

NORTH DAKOTA

BY JERRY ASCIERTO

AFFORDABLE HOUSING FINANCE • DECEMBER 2007

BISMARK—The North Dakota Housing Finance Agency (NDHFA) plans to increase its emphasis on preservation deals in 2008. About 40 percent of the state’s low-income housing tax credit (LIHTC) allocations in 2007 went to acquisition-rehabilitation deals, a figure that is expected to rise in 2008.

NDHFA said its 2008 qualified allocation plan (QAP) would again favor preservation over new construction, with about 50 percent of its tax credit authority expected to go toward preservation of older projects in 2008.

In the 2007 QAP, NDHFA set aside 10 percent of its LIHTC authority for preservation, and awarded 10 points for the preservation of federally assisted properties at risk of being lost to the stock of affordable housing. Additionally, rehabs of $7,500 to $25,000 per unit received 5 points, and those costing more than $25,000 per unit received 10 points. Both point categories were new for 2007. The minimum score for the agency to consider a project is 65.

The agency said that the 2008 QAP, which should be finalized around Jan. 1, 2008, would offer the same points. The deadline for first-round applications is March 15, with reservations announced May 15. Second-round applications are due April 30 for a June 30 reservation date.

As of mid-October, NDHFA had reserved credits to nine projects totaling 328 units. Developers requested $2.69 million in LIHTCs; $2.48 million was available. The most oversubscribed setasides were for preservation and developments on Native American reservations. Seniors projects won 35 percent of the 2007 reservations, and rural developments received 37 percent.

The North Dakota Industrial Commission expects the state to have $260 million in tax-exempt private-activity bond volume cap in 2008. Since North Dakota’s allocations are made on a firstcome, first-served basis, the state doesn’t set aside any particular amount for rental housing.

There was no allocation for multifamily bonds during 2007. North Dakota had a carryover cap of $229.6 million as of Oct. 23, 2007, and both single-family and multifamily requests are eligible to receive a share of the carryover.

2008 LIHTC PROGRAM: